DEPARTMENT OF

ENERGY

Philippine Oil & Gas Industry

Platts Forum on Oil & Gas, Biofuels, and Coal
EDSA Shangrila, Mandaluyong, MM 09 July 2013

Zenaida Y. Monsada
Director, Oil Industry Management Bureau

PRESENTATION OUTLINE

Regulatory Framework Energy Situation

Oil Situation
Alternative Fuels

DOE Initiatives/Program

REGULATORY FRAMEWORK Oil Industry

RA 7638 DOE Act
BP 33: Oil Regulation

RA 8479: Oil Deregulation RA 8749: Clean Air

RA 9367: Biofuels RA 9513: Renewable Energy
Department Circulars
Administrative Orders

RA 8184: Excise Tax

Executive Orders: Duty RA 9337: Value-Added Tax
Revenue Regulations

Oil & Gas Industry

REGULATORY FRAMEWORK
Role of DOE units
Oil Industry Management Bureau Monitoring of Fuels & blends
Quality

Renewable Energy Management Bureau

Accreditation

Quantity
Refining/ marketing process Inventory Pricing

Producers Monitoring of Biofuels Producers Secretariat for the National Biofuels Board

of

Biofuels

Additives Registration Fuel Quality Standard Setting* Petroleum Facilities Standard

Energy Research & Testing Laboratory

Testing of Samples

Setting Regulate as necessary

** considers DENR DAO on Euro-4 by 2015

Legal Services
Processes findings of violations

REGULATORY FRAMEWORK - Taxation

Duty (%)
EO 890 Crude oil Products gasoline 0 4.35 12 0

Excise Tax (P/l)

RA 8184 -

VAT (%)
RA 9537 12

diesel
kerosene jet fuel bunker fuel LPG Bioethanol - imported - local

0
0 0 0 0 EO 449 1 -

0
0 3.67 0 0 RA 9153 0 0

12
12 12 12 12 RA 9537 12 0

Biodiesel
- local only

RA 9153
0

RA 9537
0

ENERGY MIX
Power Generation Mix

Primary Energy Mix

Note:* Preliminary

DOWNSTREAM OIL SECTOR

PRYCE PETRONAS

Crude Imports Refinery

NATION

E100
Product Imports Product Exports

Refinery/Import/Export Terminal

E98
White Oil Pipeline Tankers/Barges

Black Oil Pipeline Tank Truck

Depot/Terminal

E10

Industrial Consumer / End User

Tank Truck

LPG Retail

Retail Outlet

CUT OF THE BARREL (Oil Mix 2012, in %)

Production (164.7 MBCD)/ Demand (303.3 MBCD)
6.8
14.3 5.6 8.9 1.2 37.5 CRUDE 19.0

11.2
19.0 .4.3 10.2 0.9 42.0 11.3

LPG PREMIUM REGULAR AVTURBO KEROSENE DIESEL FUEL OIL OTHERS

6.6

1.1

PETROLEUM SUPPLY vs. DEMAND (MBCD)

Market share
27.2%
9.9% 24.4%

500

450

400

38.5%

350

300

250
Petron Shell Chevron Other Players

200

150

Demand By Region
11.4%
3.9% 8.2%

100 50 0

39.1%

37.4%

Refining Cap.

Demand

Production

Imports

Exports
NCR Visayas N. Luzon Mindanao S. Luzon

GASOLINE STATIONS (2012, Number)

As of 2Q2012 New Players Number Flying V 271 Total Phils. Unioil Seaoil Jetti PTT/SBDI Eastern City Oil Metro Oil Subic Uno Fuel Nation Petroleum USA 88 Filoil Gas Co.Inc Phoenix Independent TOTAL 162 31 174 71 48 31 9 14 15 8 8 56 162 650

LUZON

3,180
VISAYAS 786 MINDANAO 1,031

Total = 4,997

08.22.2012

1,710

LPG SUPPLY vs. DEMAND (MBCD)

Demand by Region

35 30 25 20 15
10
S. Luzon 20.1%

Visayas 11.4%

Mindanao 8.2%

NCR 39.0%

N. Luzon 21.3%

Market Share
Pryce Gas 4.81% Petronas 7.76% Total 3.96% Shell .09%

5
0

Liquigaz 25.30%

Isla Gas 16.36%

Petron 41.72

Demand

Imports

Production

Total Products Demand

DUBAI CRUDE PRICES/FOREX

$/bbl

March 1984 June 2013

P/$

M-84 J-85 N-85 S-86 J-87 M-88 M-89 J-90 N-90 S-91 J-92 M-93 M-94 J-95 N-95 S-96 J-97 M-98 M-99 J-00 N-00 S-01 J-02 M-03 M-04 J-05 N-05 S-06 J-07 M-08 M-09 J-10 N-10 S-11 J-12 M-13

150 140 130 120 110 100 90 80 70 60 50 40 30 20 10 0

60 55 50 45 40

35
30 25 20 15 10 5 0

Dubai US$/bbl

Dubai P/li

Forex P/1$

110

150

170

130

30
Jan-05 May-05 Sep-05 Jan-06 May-06 Sep-06 Jan-07 May-07 Sep-07 Jan-08 May-08 Sep-08 Jan-09 May-09 Sep-09 Jan-10 May-10 Sep-10 Jan-11 May-11 Sep-11 Jan-12 May-12 Sep-12 Jan-13 May-13

50

70

90

Dubai Brent West Texas Intermediate

110 130 30
Jan-05

CRUDE

150

170

70

90

50

Jul-05

January 2005 June 2013 (in $/bbl)

INTERNATIONAL OIL PRICES (MOPS)

Dubai
Jan-06 Jul-06 Jan-07 Jul-07

Unleaded Gasoline
Jan-08
Jul-08 Jan-09 Jul-09 Jan-10 Jul-10 Jan-11 Jul-11 Jan-12 Jul-12 Jan-13

Automotive Diesel Oil LPG Contract Price

PRODUCTS

200

400

600

800

1000

1200

1400

METRO MANILA PRICING

January 2009 June 2013 (in Peso/liter)
70 65 60 55 50 45 40 70 65 60 55 50 45 40

GASOLINE

DIESEL

35 30 25 20
11/14-18 8/1-5

35 30 25 20
11/14-18

9/24-28

8/1-5

2/27-3/2

2/27-3/2

9/24-28

4/13-17

7/27-31

2/22-26

9/20-24

4/18-22

6/11-15

4/22-26

4/13-17

7/27-31

2/22-26

9/20-24

4/18-22

6/11-15

1/1-2/09

1/3-7/11

1/1-2/09

1/3-7/11

Calculated Based on Adviced Adjustments (Suggested Retail Price) Calculated from Mean of Platts Singapore Common Price Metro Manila

Calculated Based on Adviced Adjustments (Suggested Retail Price) Calculated from Mean of Platts Singapore Common Price Metro Manila

4/22-26

11/9-13

11/9-13

6/7-11

1/7-11

6/7-11

1/7-11

PREVAILING PRICES IN MM

DOE INITIATIVES
Ensured reasonable price adjustments Close monitoring of international prices and determining its estimated impact to domestic prices Posting of oil pricing formulas in the DOE website Posting of weekly oil price situationers, retail prices in key cities Organized a Multi-sectoral Independent Oil Price Review Committee, results disseminated Implemented price mitigation measures Regular meetings with the transport leaders for updates on the oil price movement and DOE programs/activities/possible assistance Fuel discounts/CSR Public transport assistance program (Pantawid Pasada) Continuing IEC on Oil Situation/Pricing/Energy Efficiency/Conservation Alternative Fuels Program Renewable Energy Development and Utilization

ALTERNATIVE FUELS
AUTO-LPG BIOFUELS B2 E10

biodiesel

bioethanol

CNG

E-TRIKE

ALTERNATIVE FUEL Natural Gas

Malampaya Gas Field 2.7 TCF (2001) 560 MW San Lorenzo First Gen IPP

1,000 MW Sta. Rita First Gen/ IPP

Natural Gas Vehicles Program for Public Transport (NGVPPT) 200 buses in the Southern LuzonManila route serviced thru the South Expressway NGV Refueling Station at a fixed/discounted price for 7 yrs. CNG Bus (2008)

1,200 MW Ilijan Power Plant NPC IPP(KEPCO)

Shell Refinery

DOE PROGRAM

OIL ISSUES and CONCERNS

Why is there disparity of prices in different areas?

RP IMPORT SOURCES
IRAQ IRAN RUSSIA KOREA CHINA JAPAN

KUWAIT THAILAND SAUDI ARABIA SINGAPORE

TAIWAN

PHILIPPINES

UAE QATAR

MALAYSIA

INDONESIA

AUSTRALIA

OIL ISSUES and CONCERNS

Limited access to local price basis Few subscribers to Platts Price Data Subscribers are restricted on data sharing (redistribution)

Oil refers to which crude/benchmark? Why behavior of crudes and products prices not always the same? What factors affect crude oil/product prices?

Impact of economic developments?

Impact of MENA developments? Impact of shale gas price to oil price?

What could lead to repeat of 2008 historical highs?

Stockpiling now a sound strategy? Subsidy? Biofuels/natgas/coal regional/global developments?

Thank you!